Gas prices

In the past several weeks, readers have brought several issues to my attention repeatedly. One of those issues is gas prices.

As I’m sure most are aware, the complaint regarding gas prices is not so much that they’re high, it’s that’s they’re substantially higher than other nearby places (i.e. Williams Lake). While I don’t have yearly averages, a quick look on Gasbuddy.com suggests that as I’m writing this, gas prices in 100 Mile House is 143.9 compared to 138.9 in Williams Lake. Meanwhile, Cache Creek is also at 143.9 and Kamloops is between 131.9 and 134.9. The difference, for someone who drives as much as me at those prices, is up to several hundred dollars a year.

We have looked into this in the past. We’ve struggled to get answers on why specifically Williams Lake and 100 Mile House differ. However, Natural Resources Canada (NRC) provides some generic answers.

When it comes to fuel, there are two types of taxes: fixed tax (10 cents of federal excise tax per litre on gasoline), according to NRC. Three municipalities also charge a fixed tax but none of them are closeby (Vancouver, Victoria and Montreal). Secondly, there’s sales tax (i.e. GST). Neither of those explains why gas would be cheaper in Williams Lake or Kamloops.

The second reason is competition, according to NRC. Price matching between nearby stations can result in prices going up and down quickly. Although with gas prices seemingly fairly consistent in both 100 Mile and Williams Lake, it also doesn’t seem the most likely candidate.

Third, is the amount of fuel sold.

“A station in a smaller community or neighbourhood with fewer sales may have to charge a higher price to cover its fixed operating costs. Plus, it may not be eligible for volume discounts from gasoline wholesalers. Likewise, if an area has many stations, each has less traffic and fewer sales, which may lead to higher prices.”

This is something we’ve been pointed to when inquiring about the differences in the past. Williams Lake has around or just over 10 gas stations (depending on how you count, i.e. bulk fuel, card locks etc.) with a population of over 10,000 while 100 Mile House has a population of less than 2,000 with about four gas stations. In other words, Williams Lake has a gas station for every 1,000 people while 100 Mile has one for every 500. Now I would suspect that 100 Mile has a greater influx of workers from outside city limits but many of those outlying areas also have their own gas stations.

Lastly, is type and location of gas stations. Location relates to higher fuel delivery costs. Type of stations refers to additional services offered. For example, if a station has a car wash or fast food, those help cover operating costs.

“In fact, so-called ‘big box’ retailers view low-cost gasoline retailing as a way to attract customers in order to increase their in-store sales.” Both of these seem somewhat unlikely given the proximity of 100 Mile to Williams Lake and the general lack of additional services in both.

Whatever the reason is for the high(er) gas prices, it seems like a lose-lose situation for everyone.